BillShrink Study: 67% Americans Paying Down Credit Card Debt

by News Guy on July 13, 2010

BILLSHRINK STUDY SHOWS MAJORITY OF PEOPLE PAYING DOWN CREDIT CARD DEBT IN 2010

Cautious consumer spending and debt reduction persist as Americans continue to emerge from economic downturn

Redwood City, CA – BillShrink (www.billshrink.com), the free personalized search engine that compares millions of products and services against an individual’s unique needs, announces a recent survey that reveals that Americans continue to aggressively pay down their outstanding credit card debt. Over the last year, BillShrink surveyed 220,000 people who came onto the site looking for advice on credit cards and found that 67% of people are now paying down their credit card balance in full each month. This represents a dramatic 24% increase over the past year.

The most recent numbers from the Federal Reserve indicate that the average amount of consumer debt is just over $8,000 per person, totaling $2.448 trillion. This marks a $113 billion decrease from the same period last year. It appears that American’s change in spending behavior and tendency to pay down credit card debt may now the new norm.

Highlights from the survey of nearly a quarter of a million BillShrink credit card users who visited the site between June 2009 and June 2010:

  • 67% of people are now paying down their credit card balance in full each month; a 24% increase from the same period last year (in June 2009, only 43% paid monthly balance in full).
  • In the last four months, which coincides with the enactment of the Credit CARD Act, the rate of debt repayment has accelerated greatly. The strengthening economy and new legislation like fair allocation of payments may be spurring Americans to tackle their personal debt.
  • Before November 2009, people carrying a credit card balance outnumbered those who paid off their balance each month.

“BillShrink has been tracking credit card debt for more than a year and we’re thrilled to see that people are continuing to avert debt,” said Schwark Satyavolu, CEO of BillShrink.com. “One of the ways they are paying down debt is by switching to lower-interest cards. We’ve also found that as card issuers revamp their risk models and lower spending limits for customers, many Americans are forced to curb reckless spending behaviors.”

More than 1.5 million people have turned to BillShrink in the past year to help make smarter decisions about financial products and to find the right credit card to match their unique spending needs.  BillShrink has found the average person can save $500 a year simply by switching to a lower interest credit card.

About BillShrink (www.billshrink.com)

BillShrink is a free, personalized search engine that helps people find the right TV service, cell phone plan, credit card, gas station and more.  By sorting through millions of products and services, BillShrink provides unbiased recommendations so users can find exactly what they need at the best price.

In an era when eight out of ten people overpay on their everyday bills and services, BillShrink helps people make smart money-saving choices. Users answer a few simple questions about spending and usage behavior, and in less than a minute, BillShrink presents the best options on the marketplace. In order to provide individualized recommendations, the company searches and simplifies more than a billion cable and satellite packages, 10 million cell phone plan combinations, 300 bank rates, 240 credit cards and 150,000 gas stations.  BillShrink then keeps the savings coming by alerting users when a better deal comes along.

BillShrink was listed among the “Top 20 Best Money Websites” by Money Magazine and named one of the “Best Web Sites” by Kiplinger’s. The company has been featured in the country’s leading news sources including The Wall Street Journal, The New York Times, Consumer Reports, Fortune, The Dr. Oz Show, The Today Show, CNN, ABC and CBS. The company publishes the popular “Shrinkage is Good” blog, which features commentary on the latest economic news and savings tips.

Editor’s Note: BillShrink surveyed 230,000 users from June 2009 – June 2010. By answering ‘Yes’ or ‘No’ to the question “Do you pay off your credit card balance each month?,” users were directed to credit cards that offered the lowest interest rate or the highest reward (cash back, airline, etc.) advantages. The payoff rate of total card balances increased 24% between June 2009 and June 2010.

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